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1 Sign NVIDIA Still Dominates AMD

Image source: NVIDIA.

During the third quarter, Advanced Micro Devices(NASDAQ: AMD) reported strong sales of its new Polaris graphics cards. The company's computing and graphics segment, which includes GPUs as well as CPUs, grew revenue by 11% year over year, with the launch of Polaris more than offsetting weak demand for desktop processors. The segment still posted a loss, but a far smaller one compared to the same period last year.

Market leader NVIDIA(NASDAQ: NVDA) will be reporting its third-quarter results on Nov. 10. The company's guidance calls for substantial revenue growth, no doubt driven by strong sales of its Pascal GPUs. With both AMD's Polaris and NVIDIA's Pascal driving growth, it can be difficult to parse whether AMD is gaining any ground on its rival. One piece of data suggests that NVIDIA's dominant position remains intact.

PC gamers stick with NVIDIA

Steam, the dominant PC gaming platform operated by Valve, collects data on the hardware configurations of its users and provides monthly updates as part of its hardware and software survey. I've written before about NVIDIA's dominance on Steam. The GTX 970, launched in 2014, remains the most widely used graphics card on the platform, with the GTX 960 and GTX 750 Ti rounding out the top three. AMD fails to crack the top 15.

The data from Steam aren't perfect. Participation in the survey is optional, and it's unclear whether that creates any sort of bias. The data don't tell us much about the PC market as a whole. But I think it's reasonably representative of the PC gaming market, thus giving us a window into trends occurring in the industry.

The only Polaris graphics card that shows up on the list is the RX 480, the highest-end card that AMD has launched so far. The RX 470 and RX 460 have yet to show up on the list, but they were launched more than a month later.

In October, the RX 480 accounted for 0.28% of graphics cards in use on the Steam platform, according to the survey data. The card faced availability issues early on, which may have depressed the numbers a bit. But NVIDIA's Pascal graphics cards were also in short supply upon launch.

NVIDIA launched its GTX 1080 and GTX 1070, both far more expensive than the RX 480, about a month earlier than AMD's debut Polaris card. The GTX 1060 came in late July, a few weeks after the RX 480 became available. All three cards have easily surpassed the RX 480 on Steam.

Graphics Card

Percentage of Steam Users in October

GTX 1070

1.30%

GTX 1060

1.03%

GTX 1080

0.75%

RX 480

0.28%

Data source: Steam hardware and software survey.

The conclusion I draw from these data is that Polaris has not been a runaway success for AMD. These new cards are driving year-over-year growth, but it's important to remember that AMD's graphics market share was near its lowest point during the third quarter of 2015. It would have been shocking if Polaris wasn't producing significant year-over-year revenue growth, given the comparison.

There's no question that AMD's lineup of graphics cards is more competitive today than it was a year ago. But, at least on Steam, NVIDIA's grip on the market doesn't seem to be loosening. AMD will launch higher-end Vega graphics cards next year, and that may help the company win back share at the high end. But for now, NVIDIA remains king.

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